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PCAOB’s latest data reveals cleaner inspection findings

By Bryan Strickland
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The PCAOB’s latest analysis of its inspections of public company audits showed significant improvement in nearly all firm segments.

In Staff Update on 2025 Inspections of Public Company Audits, the PCAOB reported that the rate of Part I.A deficiencies decreased from 38% in 2024 to 23% in 2025. Part I.A deficiencies are logged when the PCAOB determines that an audit firm failed to obtain sufficient appropriate evidence to support its opinion on a financial statement.

“We are working to identify the factors that produced these results in order to better understand both the drivers of improving audit quality and the root causes of audit deficiencies,” PCAOB chair Demetrios Logothetis said in a news release. “This will enable the PCAOB to deliver more meaningful insights that support high-quality audits and investor protection.”

According to the release, the PCAOB’s Division of Registration and Inspections inspected 143 PCAOB-registered public accounting firms and reviewed portions of 780 public company audits in 2025. While the deficiency rate increased from 24% to 26% among non-U.S. global network firms, it decreased among:

  • Big Four firms: From 20% in 2024 to 8% in 2025. Collectively, Deloitte, EY, KPMG, and PwC audited about 80% of the market capitalization of public companies listed on U.S. exchanges as of 2025.
  • U.S. global network firms (GNF): From 26% in 2024 to 13% in 2025. The six U.S. GNFs (the Big Four plus BDO and Grant Thornton) regularly provide audit reports for more than 100 issuers and are inspected annually.
  • U.S. nonaffiliated firms: From 52% in 2024 to 18% in 2025 for those regularly providing audit reports for more than 100 issuers and inspected annually. From 53% in 2024 to 32% in 2025 for those regularly providing audit reports for 100 or fewer issuers (inspected at least once every three years).
  • Non-U.S. nonaffiliated firms: From 76% in 2024 to 58% in 2025.

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.